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To: DavidG who wrote (13383)7/1/1998 3:15:00 PM
From: Hightechhooper  Read Replies (1) | Respond to of 25814
 
Soundview comments from the yahoo thread:

Based on our preliminary estimation, we believe that the Symbios acquisition could be mildly accretive to our $1.66 CY98 EPS estimate (range of $1.65-$1.70). While higher CY99 EPS estimates can lead to some enthusiasm for LSI's stock, we are not compelled either on a valuation or on s "strategic fit" basis.

Given all the lawyers learking around here I had better put in a standard disclaimer regarding the authenticity of the above data since it did come from Yahoo!, but the price action supports the above comments (or vise versa).

Now, this is a perfect example of what I have been talking about over and over again. Forget the question about whether or not this deal will prove to be beneficial for LSI, no one knows the answer to that right now. Instead focus on the fact that LSI made this acquisition because they believe that it WILL add SIGNIFICANTLY to their business and build shareholder value. However, they have been completely unable to communicate this belief and the reasons for it to the investment community. THIS IS THE PROBLEM, THEY CANNOT SELL THEIR IDEAS OR THEMSELVES!! These analysts have already formed their opinions about the impact of the deal (and despite what tony says the results have been decidedly neutral) so do you honestly think that with one conference call LSI is going to be able to change their minds? I can see it now..."last week I said this deal was unimpressive but after discussions with management now I think it is the greatest". As Jockey boy has shown us, once opinions are formed they are difficult to break. LSI has missed out on its opportunity to leverage this deal. The window of opportunity is closing fast and the conf call won't save it.



To: DavidG who wrote (13383)7/1/1998 5:30:00 PM
From: Tony Viola  Read Replies (2) | Respond to of 25814
 
David, Re: "How does the CRUS, LU, and ARM announcement impact LSI and SYMBIOS in
the HDD chip market?"

From reading the article you URL'd and the one below, it sounds like the CRUS, LU etc. ARM chip is intended for use on hard disk drives, rather than on a motherboard or in a PCI or ISA or other kind of slot inside of a PC or server. Reasons are highlighted in bold below, with my comments in italics. The fact that the chip is intended to go on hard drives makes it no competition to LSI/Symbios, unless one of them has a controller chip that resides on hard drives. I don't think so. Someone correct me if I'm wrong. I admit I don't know LSI's products as well as I know, e.g., Intel's. I can say confidently that if one of them does have such a product, it's small potatoes to them.

biz.yahoo.com

Monday June 29, 6:01 am Eastern Time

Company Press Release

Cirrus Logic Unveils Chip Integration Breakthrough for
Next-Generation Hard Disk Drives

Integrating the Functions of as Many as 5 Chips, New 3CI Chip Reduces Cost
& Size; Open Processor Architecture Promises to Set New Industry Standard

FREMONT, Calif.--(BUSINESS WIRE)--June 29, 1998-- Demonstrating its technology leadership in
mass storage, Cirrus Logic Inc. (Nasdaq:CRUS - news) today launched the industry's most highly
integrated chip solution (CL-SH8665) for next-generation hard disk drive (HDD) designs. Delivering
the functions currently performed by as many as five separate components, Cirrus Logic's new
3CI(TM) (Channel, Controller, microController Integration) platform enables unprecedented HDD
performance for mainstream desktop PCs.

In addition, because 3CI delivers a nearly complete HDD solution in a small and cost-effective
package, it also supports the rapidly growing sub-$1,000 and mobile PC markets. With its significant
cost and size advantages, the new 3CI platform has already been selected by a major HDD
manufacturer
(goes on the hard drive, like I said) and is poised to extend Cirrus Logic's leadership in the HDD market. Having shipped
over 30 million HDD read-channels in 1997, Cirrus Logic is currently the leading supplier of key
disk drive technology.

''Hard disk drive manufacturers face relentless competition to reduce costs while improving drive
performance and capacity,
(more conclusive evidence it goes on the hard drive) '' said Xavier Pucel, senior industry analyst semiconductor applications
markets for Dataquest. ''The growth in data-intensive multimedia and Internet content has increased
storage demands, while the sub-$1,000 PCs exert price pressure. With its highly integrated 3CI
platform, Cirrus Logic is well positioned to support the performance-driven and cost-sensitive hard
disk drive market.'' Dataquest forecasts the desktop HDD market to grow from 101 million units in
1998 to 173 million units by 2002.

Integration Lowers Cost, Size & Assembly Time

The new 3CI platform leverages Cirrus Logic's expertise in mixed-signal design and storage-specific
algorithms to provide key HDD functions on a single-chip: a partial-response-maximum-likelihood
(PRML) read-channel for reliable data acquisition; an Ultra DMA33 disk controller for high-speed
data transfers; and an ARM 32-bit processor core to handle both system and servo control functions.
Since Cirrus Logic's 3CI chip already integrates servo logic into its disk controller, and the ARM
processor includes program memory, the only system functions needed to create a complete HDD
design are the pre-amp, motor drivers and buffer memory.
(This is absolutely internal to hard disk drive stuff...mixed signal, read channel, servo control, pre-amp, motor drivers. That's enough proof to me that the CRUS device is intended for internal to disk drives, which makes for little or no competition to LSI or Symbios).

Open Architecture Fosters Innovation

While 3CI is among the first to integrate key HDD functions into a single chip, its use of an open
processor architecture from ARM Ltd. initiates a fundamental change in the disk drive industry,
paving the way for an open programming environment and supplier choice in mass storage. Unlike
proprietary microcontrollers and DSPs, an ARM-based chip solution gives manufacturers the
flexibility to select from most major semiconductor suppliers, rather than being locked to a single
source or closed technology. Since HDD firmware can entail a multi-million dollar development
effort, ARM protects a significant investment, and offers unmatched opportunities for HDD OEMs to
leverage their designs long term.

The open ARM architecture has already been embraced by 29 licensees worldwide, including most
of the major semiconductor suppliers to the mass storage market. With its potential for reducing
firmware development costs and accelerating time-to-market, the open ARM architecture addresses
two critical requirements for success in the competitive HDD market. Cirrus Logic expects its use of
the ARM processor to enable the mass storage industry to move from older, proprietary technologies
to a more innovative and cost-effective open architecture.

''As more and more of the hard disk drive's electronics are integrated onto a single-chip, the adoption
of an open processor architecture enables drive manufacturers to select components based on who
has the best technology rather than being locked into a closed microprocessor,'' said Steve Dines,
general manager of Cirrus Logic's Mass Storage Division. ''The cost benefits and design flexibility
of the ARM architecture are so significant that we believe within five years the entire disk drive
industry will adopt its open programming environment, much as the cellular phone industry has
converted to ARM. We expect to lead that migration.''

Benefits of ARM

The ARM 32-bit RISC core processor gives the 3CI platform the performance needed to perform
both the microcontroller and servo control functions in today's HDD designs. Further, the ARM
processor core dissipates very low power and fits within a small die size, making it ideal for future
3CI storage applications, from mobile and consumer PCs to entertainment appliances. Backed by
industry momentum, the ARM roadmap ensures that the core processor will continue to meet the
needs of the drive manufacturer as areal density and spindle motor speeds increase.

In addition to offering an optimized hardware solution, ARM also enables very efficient software and
code development. For example, to minimize memory size and overall system cost, ARM's TDMI
feature increases code density by automatically compressing frequently used system instructions from
32-bits to 16-bits. Moreover, ARM's C-Language compiler generates very efficient code,
significantly reducing firmware code development time compared to writing in assembly language.

System Flexibility Supports Customer IP

The 3CI architecture has been optimized to easily incorporate a customer's intellectual property,
enabling drive manufacturers to differentiate their product with unique features.

''We realized early on that a key requirement in the HDD market would be the ability to efficiently
combine our customer's intellectual property with our mass storage expertise,'' said Dines. ''With
more than 10 years of experience building customized chips for the HDD market, we have developed
a very robust methodology for integrating large functional blocks onto a single piece of silicon. This
same methodology has enabled us to create the 3CI platform, which allows us to integrate our
customer's intellectual property -- even the 80,000-gate ASIC blocks that are typical of customers'
hard disk controllers.''

Industry-Leading Read-Channel Technology

Although many semiconductor suppliers are developing highly integrated chips for drive electronics,
no other supplier has tackled the challenge of integrating a mixed-signal read channel in a standard
CMOS process. By combining its mixed signal expertise, signal processing algorithms, and leading
CMOS technology, Cirrus Logic integrated its industry-leading PRML read-channel core into its new
3CI platform, making it the industry's highest performing and most cost-effective HDD chip solution
on the market.

3CI's PRML read-channel core is manufactured in 0.35-micron standard CMOS and follows Cirrus
Logic's strategy of maximizing signal processing in the digital domain, making it ideally suited for
integration. The current 3CI read-channel core is capable of a data transfer rate of 300 Mbits/s. When
0.25-micron solutions that are under development now become available, they will elevate the core's
data transfer rate to 500 Mbits/s.

In addition to its high-speed data transfer rate, the 3CI read-channel core is also equipped with
Cirrus Logic's proprietary PRML technology, which uses a programmable digital detection technique
to accommodate the wide variety of data pulse shapes that are typically received from the magnetic
head. This innovative technique allows bits of data to be placed closer together on the media, thereby
increasing the HDD's per platter storage capacity by as much as 20-percent beyond what standard
PRML can deliver. By utilizing this proven technique 3CI will enable HDD manufacturers to create
higher capacity drives that offer a significant reduction in cost per Mbyte.

High-Speed Disk Controller

A Cirrus Logic HDD controller is also integrated into the 3CI platform. The 3CI HDD controller
core contains an ATA-4 host interface with Ultra DMA33 Mode, which enables data to be burst from
the HDD to the host at 33.3 Mbytes/sec. This high-speed interface allows the host CPU to retrieve
data faster, freeing up the host CPU to handle additional tasks and eliminating the performance
bottleneck associated with sequential streaming applications, such as video playback.

In addition to providing the latest in high-speed host interface technology, the integrated HDD
controller core is also equipped with Cirrus Logic's industry-leading error correction code (ECC)
technology. Cirrus Logic's innovative ECC features programmable error correction technology,
which allows HDD manufacturers to optimize the data integrity for a particular drive configuration.
When configured for the highest degree of protection, 3CI's ECC technology can correct a single burst
of up to 161 bits or a double burst of up to 73 bits on-the-fly. This powerful ECC technology offers
unprecedented detection and correction capabilities and can improve system performance with its
ability to correct multiple errors on-the-fly with no firmware intervention.

Packaging and Availability

The first product in the 3CI platform is implemented in a cost-effective 0.35-micron, 3.3-volt CMOS
process. Scheduled to sample in Q3 1998 in 208-pin LQFP packages, the device will be available in
volume quantities by Q4 1998 at $15 each in quantities of 100,000 units.

Cirrus Logic, Inc.

Cirrus Logic is a premier supplier of system-level integrated circuits that demand high-performance
mixed-signal processing. The company applies its system expertise to enable high-volume
applications in data storage, networking, and multimedia for both computing and consumer
electronics markets as well as ultra-precision data acquisition applications for industrial automation
and instrumentation markets.

Tony